Question
Can my research fellowship qualify for the foreign earned income exclusion?
I am on a 20-month Fulbright research fellowship abroad. I am not working towards a degree, and the fellowship is therefore taxable, earned income. The foreign country is my tax home, and soon I will qualify for the foreign earned income exclusion by the physical presence test. However, I am not sure if the exclusion applies to the fellowship.
On the IRS website for Foreign Earned Income Exclusion - I am Eligible to Claim... it states that income from "a Personal Services Agree with a US government agency or instrumentality" is not eligible. The money is paid to me by the United States Israel Education Foundation - a foundation funded by the government's of both nations.
Therefore, is the foundation considered a US government instrumentality? And is the fellowship considered a Personal Services Agreement?
The IRS Fulbright Grants page does not discuss this whatsoever.
Thanks
On the IRS website for Foreign Earned Income Exclusion - I am Eligible to Claim... it states that income from "a Personal Services Agree with a US government agency or instrumentality" is not eligible. The money is paid to me by the United States Israel Education Foundation - a foundation funded by the government's of both nations.
Therefore, is the foundation considered a US government instrumentality? And is the fellowship considered a Personal Services Agreement?
The IRS Fulbright Grants page does not discuss this whatsoever.
Thanks
